Details added (first version posted on 17:01)
Baku, Azerbaijan, July 27
By Anvar Mammadov – Trend:
Azerbaijan’s Azerishig OJSC and the Asian Development Bank (ADB) have signed an agreement on the allocation of the loan’s first tranche to improve the power distribution system in Azerbaijan, ADB Baku office told Trend July 27.
The agreement was signed July 22 by the head of Azerishig OJSC Baba Rzayev and ADB country director in Azerbaijan Nariman Mannapbekov.
The amount of the first tranche of the loan, which was allocated for 25 years with a five-year grace period, is $250 million.
Mannapbekov said earlier that the loan interest rate will be formed on the basis of the six-month LIBOR (London interbank offered rate) with a very low margin – nearly 0.4 percent.
The guarantor of the credit debt’s repayment is the state, in connection with which the ADB signed a guarantee agreement with Azerbaijan.
In May 2015, Azerbaijan and the ADB signed a memorandum of understanding on investment program worth $1 billion that envisages reconstruction and modernization of the country’s energy system.
According to the draft investment program, the ADB will allocate $750 million to be rolled out in three tranches of $250 million each and the remaining $250 million will be allocated by the Azerbaijani government.
The investment underpins the government’s commitment to achieve efficient use of energy resources and to provide sufficient and reliable electricity supply to all consumers.
The multitranche facility will run for over six years and the first tranche of $250 million will cover investment activities until the end of 2018.
ADB, based in Manila, was established in 1966 and is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
Azerbaijan became the ADB member on Dec. 22, 1999.